E-Newsletter
September 2006
Thinking About Selling?
Some Things to Consider…
Well
summer is fading quickly and fall is just around the corner and to all of us
“Zonies” that means just one thing, Snow Birds. As Arizona’s seasonal population
increases the demand for housing also increases and that generally accounts for
a bounce back in the Real Estate market from a summer slow down. At least that
is the conventional wisdom and here in Sedona we hope that to be the case as we
come off our slowest summer since 1999. Frankly the market in 2006 probably
wouldn’t be such a shock to everyone if 2005 hadn’t been the rocket ride it was.
Sellers and Realtors got lulled into believing every year would be like that and
then poof, back to reality.
Sellers in the coming months will be forced to make some difficult decisions.
Can you afford to turn down lower than expected offers hoping the market picks
back up in a few months? That may be a little risky. We all expect the market to
pick up but the timing is still the $64,000 question. When making that tough
choice I offer the sellers a few tidbits to help them with their decision.
1. What will be your monthly carrying costs?
To calculate this you need to add together your monthly property tax (by
prorating your annual fee), your monthly insurance costs, homeowners fees,
Mortgage payments (just the interest portion), and any other miscellaneous costs
associated with maintained. If you own the home free and clear you then replace
the mortgage amount with an estimated value of the money, which if freed up,
would return in a reasonable investment. When a person takes the time to add
this up often times they are surprised to see what a few additional months means
in actual expenses. If you are quibbling over 5-$10,000 you may realize it’s
better to settle for a little less in return for additional time sitting on the
market. After all there are no guarantees the offers will get any better.
2. Why are you selling the home?
If the answer to this is downsizing then just move onto number three but if you
are moving to a different area keep this in mind: It is very likely the area you
are moving to is experiencing a similar market so selling in a down market but
then buying in a down market makes a bread even situation. If you wait for the
market to get stronger it may very well be strengthening in your new destination
as well which of course means you’ll pay more there.
3. Capital Gains
If the answer to question 2 was downsizing then you must also take into account
the gain you will realize on the sale of that second property. Now I don’t mean
it makes sense to take less money because the taxes will be less but just
remember no matter what amount you settle for the government will be taking
roughly 20%. That will help reduce the sting of settling for a lower amount.
4. Be honest with yourself and your Realtor
I’ve seen to many clients put themselves in very tough situations because they
tried to “time the market”. Even experts have a tough time seeing into the
future even as short a term as three months. To many factors on a National or
Global scale can quickly alter events. For example who really expected Gas
Prices to go as crazy as they did? Wasn’t conventional wisdom that we went to
Iraq for the oil and at worst it would provide a steady supply. When gas went to
$3 a gallon, people traveled less. With fewer visitors already and then a couple
of summer forest fires later and all of a sudden Sedona isn’t nearly the trendy
spot it was last year. It can change that fast.
The bottom line is hire a good agent and rely on their expertise. Difficult
markets are where good agents shine. Take advantage of that experience and use
it for your personal gain.
Tod Christensen
Designated Broker/Vice President
Coldwell Banker First Affiliate |
